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Norfolk Island economy headed for disaster following Australian Government intervention, new report claims

An independent report on the economic situation on Norfolk Island following the Australian Government takeover of governance of the island last year, released today, warns the island’s economy is heading for disaster as a result of spiralling costs and inappropriate regulation. Problems include the widespread imposition of Commonwealth and NSW regulatory regimes; the planned introduction of Australia's Modern Award System; the failure of the Australian Government to take up the responsibilities previously held by the Norfolk Island Government, such as for the promotion of tourism; the loss of direct passenger airline services between New Zealand and Norfolk Island; restrictions placed on primary producers and agricultural pursuits; and the removal of the general revenue raising powers of the Norfolk Island Government.


Written by economist and former scientist Dr Chris Nobbs, “On the Brink of Disaster: The Impact of the Australian Government Reforms on Norfolk Island Businesses” provides a detailed analysis of the impact of legislative and regulatory changes imposed on the island during the past 15 months.

Dr Nobbs concludes that the growing crisis is the direct result of flaws in the intervention by the Australian Government in Norfolk Island's governance and economy from 1 July 2016.

The report outlines the impact of substantial cost increases facing businesses, including double-digit price rises for incoming freight, a 15 per cent rise in telecommunications costs, a 12.7 per cent rise in regional council fees, along with regulatory changes that will see wage costs jump more than 35 per cent next year.

“Based on a detailed examination of the current economic situation and the impact of significant legal and regulatory changes, it is projected that Norfolk Island will suffer a very large rise in prices, a steep downturn in tourism, a slump in business, a rise in unemployment, and widespread community distress,” Dr Nobbs said.

“By requiring both that Norfolk Island pay its own way and that Norfolk Islanders become like mainland Australians in terms of their obligations and expectations, the Australian Government is crushing the island's economy in a vice from which few groups will escape unscathed.”

Critical factors the report singles out as responsible for the economic crisis include:

- the widespread imposition of Commonwealth and NSW regulatory regimes;
- the planned introduction of Australia's Modern Award System;
- the failure of the Australian Government to take up the responsibilities previously held by the Norfolk Island Government, such as for the promotion of tourism;
- the loss of direct passenger airline services between New Zealand and Norfolk Island;
- restrictions placed on primary producers and agricultural pursuits; and
the removal of the general revenue raising powers of the Norfolk Island Government.

Urgent factors

The report outlines a series of urgent recommendations for the Australian Government, including:

- the halting of further Commonwealth impositions on Norfolk Island; and
- that the Productivity Commission carry out research and conduct a public inquiry to determine the real financial capacity of the island and how it can survive economically, socially and culturally at reasonable cost.

Norfolk Island, a small island in the South Pacific Ocean, is an external territory of Australia. From 1979 until 2015, the island enjoyed a large degree of self-government, but this was terminated by the Australian Government. The changes resulted in the disbanding of the Norfolk Island Legislative Assembly, the Norfolk Island Government, and local public service. The Legislative Assembly was replaced by a "regional council", constructed under Commonwealth legislation, and modelled on a New South Wales local authority template.

The report is available for download at: http://www.norfolkonlinenews.com/impact-of-the-reforms-on-norfolk-island-businesses.html

Source: AAP 20 Nov 2017 11:00 AM